Vancouver might have adequate banking offerings for a medium-sized city, but businesses and families in Metro Vancouver are continuing to search outside the traditional big-five bank bundle for financial service options.
However, they may not be getting the right information, say industry observers.
“I don’t think [business owners] even know how to get the financing they need outside of their banks,” said James Jang, president of small-business finance with Accord Financial.
Jang has been working with equipment and small-business finance for nearly 20 years and has often been surprised at what he says is a “lack of understanding with business owners on what financing is available.”
Accord Financial is a member of the Canadian Finance & Leasing Association (CFLA), which represents the asset-based financing, equipment and vehicle leasing industry in Canada.
According to a recent CFLA report, banks remain the primary source of funding for most equipment, and expectations of financing companies have generally increased.
“Typically, when they leave their banking network environment, [financing] is a complete mystery to a lot of people, and fragmented,” Jang said. “There is a lot of deception in the industry as a whole and I think all of these things, directly and indirectly, affect people’s willingness to do things.”
Yet trends show people in B.C. small towns gravitating toward credit unions as economic uncertainty spreads.
Credit unions in B.C. have seen a generous increase in interest from expats or families relocating within the province for various reasons. Among them, community engagement, connecting with other community members and supporting local business are top of mind.
“We can help people get connected, not just into knowing people and knowing local business and that stuff, but also how to get involved in the community,” said Maury Kask, chief customer experience officer for Westminster Savings Credit Union.
“I know what it’s like to go to a different place and try to figure it out and get grounded.... That’s what we specialize in.”
Vancouver City Savings Credit Union, or Vancity, is Canada’s largest credit union by size while Coast Capital Savings, headquartered in Surrey, is largest by membership, which last year reached 564,000 in the second quarter.
According to the Canadian Credit Union Association, the total number of credit union memberships in B.C. in 2018 totalled over 1.9 million, making it the province with the highest membership numbers in the country.
B.C. credit union members had, on average, over $70,000 in savings and deposits activity and over $60,000 in loans in 2018. B.C. has 42 credit unions with 379 branches in communities across the province.
“Credit unions are fully Canadian owned and headquartered locally, so they play an important role in driving forward local economies through job creation,” said Martha Durdin, CEO of the Canadian Credit Union Association. “Credit unions are also one of the largest providers of small-business loans.
“British Columbians appreciate the value credit unions provide not just to individual customers but also to communities across the province, especially in small towns. B.C. has one of the highest credit union memberships across Canada, and some of the largest credit unions in the country are in British Columbia.”
For budding businesses or small-business owners seeking alternative financing options, Small Business BC (SBBC) has been providing assistance for decades. In 2017, SBBC advisory services delivered increased by 33% and in 2018, SBBC delivered over 298 seminars, 10% more than the previous year.
The SBBC website offers three generalized options for small-business owners looking for financing solutions. Of the three, Vancity offers additional loans that are based on incentives like green business, eco-efficiency, local businesses and more. •
With files from Business in Vancouver’s Vancouver Relocation Guide